Having read Gordon's extensive review the fact the he feels based on his tests that the G3 matches the D5100 for IQ I wondered if the G3 sensor manages to improve IQ in other ways other than just being better at higher ISO's?

In other words has it always been the case that the sensor used in earlier models like the G2 and GF2 has matched DSLR IQ upto say 800 ISO but beyond that the DSLR's like the Nikon D5100 remained way ahead until the G3 sensor arrived or is it the case that the G3 sensor also manages to improve IQ in other areas including better dynamic range as an example?

4/3 sensors will always lag behind larger sensors for higher ISO IQ/DR. The gap has been narrowing though with each new generation sensor.

Something else to consider is that many DSLRs have a higher resolution than 4/3 sensors and so have slightly more pixels in a slightly bigger area, so the pixel density between formats is perhaps similar.

Compare Sony's NEX7 chip with 24mp and Panasonic's G3 chip with 16mp. I can't be bothered to do the maths but you'd probably find their sensors' pixel density is also similar.

Then there is the new D800 full-frame sensor with 38mp (doh!) which equates to around 9mp on a 4/3 sized sensor

...has it always been the case that the sensor used in earlier models like the G2 and GF2 has matched DSLR IQ upto say 800 ISO...

On one hand, no, because at ISO400 and below, there is very little difference between the G3/GX1 sensor and the previous gen G2/GF2 sensor. It's only when you get to ISO800 and above that the new sensor improves over the old and "closes the gap" so to speak between itself and the sensor in the D5100.

On the other hand, yes, because at ISO400 and below, the gap between either generation of Pany sensor and the Nikon sensor is small enough that the skill of the photographer and post-processor will have a more significant impact on the resulting images than the sensor tech.